May 13, 2013

4 Scary Charts Warning Of The Next Financial Crisis

It may not happen next week, but it will happen. It appears that Japan is on an unstoppable path to financial Armageddon.

Over the past 20+ years, the Japanese economy has unwound the excesses caused by a giant property and financial bubble. At the same time, the country's aging demographics has increased social costs while the pool of taxable labor declined. Consequently, Japan has stagnated and repeatedly dipped into deflation.

This spring, the Bank of Japan (BofJ) announced insanely aggressive monetary expansion to finally break the deflationary curse by targeting a 2% inflation rate within 2 years. Unfortunately, I believe this policy move simply shortens the time until Japan meets its fate.